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  • 1. Freedom of Association and freedom of contract - parallel lives? What has changed under the Fair Work Act? See BHP Iron Pty Ltd v AWU (2000) FCA 30.

1. Freedom of Association and freedom of contract — parallel lives? What has changed under the Fair Work Act? See BHP Iron Pty Ltd v AWU (2000) FCA 30. Essay Example

  • Category:
    Law
  • Document type:
    Research Paper
  • Level:
    Undergraduate
  • Page:
    4
  • Words:
    2580

FREEDOM OF ASSOCIATION AND FREEDOM OF CONTRACT; FAIR WORK ACT 2009

Topic Title: Freedom of Association and Freedom of Contract-Parallel lives? What has changed under the Fair Work Act? See BHP Iron Pty Ltd v AWU (2000) FCA 30

Introduction

The aim of the Fair Work Act 2009(Cth) (FW) was enacted to protect the rights of the employee are protected and that an employee has the freedom of entering into a Collective Bargaining Agreement (CBA) or joining a trade union. The International Labour Organizations (ILO) has over the years lobbied for the state to harmonize labour laws that are consistent with international standards as well as protecting the interest of the workers1. The Act was further propelled by the fact that Australia enterprise and collective bargaining system had failed to effectively advocate for freedom of association and contract.

The purpose of labour law according to Otto Kahn-Freund is to ensure that there is a force that counters the inequality inherent in the bargaining power of the employer-employee relationship2. It is important to state that the freedom of association goes hand in hand with that of freedom of contract because the work of a union is not only limited to payment of union fees but also engaging in activities that advance the rights of the worker3.

The paper will focus entirely on the place of freedom of association under the FW Act 2009 as well as the right of a worker to contract or have a say in their contract of service or contract of services. The case under study is the BHP Iron Ore Pty Ltd v Australia Workers Union4, Work Place Relations Act and the Fair Work Act 2009. Importantly is the employer entitled to engage in practices that can inhibit an employee from joining a union? The freedom of association protects the employees from adverse action on basis of participating in industrial activities through legislated law.

Case: BHP Iron Ore Pry Ltd v Australia Workers Union5

Facts of the Case

The BHP Iron Ore Pty Ltd (BHPIO) a subsidiary company of the Broken Hill Proprietary Company Ltd (BHP) that carries on business in Western Australia in the processing and production of iron ore . Prior to November at least 95% of the employees of BHPIO had subscribed to the five trade unions including the Australian Workers Union (AWU).

BHPIO in its operation decided to adopt the Western Australian Workplace Agreement (“WAWA”) a standard form of a Staff Contract of Employment forwarded to individual employees offering a package providing for; three compulsory clauses, establishing a five year duration for the contract and stipulating a dispute resolution mechanism, and with another clause prescribed the employment terms and conditions to be amended from time to time in the Staff Handbook. The terms of employment and conditions of employment was controlled by the staff handbook, the employment contract but not the WAWA. The employment contract stipulated that the employer had the right to determine whether a worker would work in the shift work or day work, due to this a worker would be paid more about 7% greater than the base salary and annual increment of salary both at the discretion of BHPIO. The contract was also non-negotiable since it was on a take-it or leave-it basis. This prompted the unions to demand for a collective bargaining agreement to be entered into.

Due to a series of disagreements the union gave notice for industrial action between 7thand8th December and on the 13th of January 2000 the union notified BHPIO of a day strike to start on 17th and end on the 19thof January. In January 2000 the five national trade unions sought an interlocutory injunction to restrain BHPIO to the Federal Court to restrain it from offering further WAWAs.

Legal Issues

  1. Whether the WAWA reduced the collective bargaining power of employees who had not accepted the staff contracts by withdrawing their right to participate in collective action.

  2. Whether BHPIO’s intention was to reduce union membership to avoid collective bargaining in future contravening the freedom of association under sections 298K, 298L and 298M6 prohibiting injuring employees, altering employment position to their prejudice to induce them to cease membership in any union.

  3. WAWAs as bonafide way of introducing work flexibilities in the face of a recalcitrant unions

Principles set by the case

Gary J said that there was a breach of section 298 (b) or (c) since by BHPIO offered better employment terms and conditions to those willing to accept WAWA and not under the Award. There was also a breach of section 298M of WRA that BHPIO was in breach be of conduct since the WAWA an effect of inducing the employees to cease membership in the unions despite BHPIO not having such intention. Gary J further held that the workers who had taken the WAWA were still capable of exercising their right to free association with Unions because BHPIO desired to rid its workplace and make unions irrelevance.’ The court granted the injunction.

BHPIO appealed against the decision of Gary J at the Federal Court where the Court held that section 298 K7 had not been breached since BHPIO was not active and deliberate, in the conduct of the award but it was the action of their fellow employees’ choice to sign the WAWA’s. The Court further stated that there was no “breach of contract of employment since the award had not been incorporated into the contract of employment.”

In the final decision by Kenny J, he stated that BHP was to motivate workers through workplace agreements since the unions were holding back introduction of essential workplace transformation and WAWA provided a better way to improve flexibility and change. Further even though the aim of the WAWA objective was to exclude unions, it was not intended to stop employees from being members. The Union claims were dismissed.

Discussion Changes in the Fair Work Act

The purpose of Fair Work Act is to provide an impartial structure for corporative and industrious workplace relationships that is fair and representative through recognition of the fundamental freedom of association8. Freedom of association is protected by Part 3-1 of the Fair Work Act and particularly section 3469 prohibits an employer from taking adverse action against an employee for being a member of a union or association where he engages or intends to engage in industrial activity10.

Section 346 of the FWA11 guards a person from adverse action taken because that person is not an officer or a member of an association due to participation in industrial activity. TheBHP case12 is in ensuring that there is a prohibition against adverse action because an employee’s union is not only in reference to the fees but extends to the values, concepts and activities associated with Union activities13.

The changes brought about by the FW Act 2009 does away with conciliation and arbitration of disputes however it is only retained in the disputes that relate to bargaining14. The rights extended by the Act surpass those previously provided for under the
Workplace Relations Actwith the introduction of good faith in bargaining principles as opposed to individual agreement and in CBA negotiation to protect the rights of freedom of association strengthening the place of the unions15.

The FW Act extends the influence of a union by increasing the scope for which a union employee can take part in industrial activity. The freedom of association ensures fairness and protection in the workplace especially with workplace and industrial rights such as freedom of association, sham arrangements and discrimination16. McIntyre J in Alta17 he defined freedom of association as “the principle that an individual is entitled to do in concert with other that which he may lawfully do alone, and conversely, that individuals and organizations have no rights to do in concert what is unlawful when done individually”18

FW Act provides that an employee has the right to freedom of association19 while it enumerates the good faith bargaining necessities and it states that an enterprise agreement must desist from whimsical or unjust conduct that chips away the freedom of association or collective bargaining20. Further at section 336 (b) freedom of association is protected by ensuring that; an employee can join a union freely; can or cannot be represented by industrial associations and participate freely in lawful industrial activities.

Who is entitled to freedom of association as a workplace right? Section 341 (1) of the FW Act a person is entitled if one is allowed to; the benefit of a recent award or enterprise agreement21, law of the workplace of that of an industrial body. Further the person must be entitled to a role under a workplace mechanism, a law or an order declared by an industrial body. Protection is extended to a person capable of initiating or participating in proceedings under a workplace law or instrument22 this includes court proceedings, conferences, protected industrial action, making of an enterprise agreement or terminating and individual flexibility arrangement. A person must have the capacity to make complaints or inquiry to a person or body that has the capacity under a workplace law.

Conflict of interest arises where the employer-employee relationship is affected especially when it is at odds with the duties and obligations of an employee for instance the action taken by the employee is to embarrass the employer23. The contract entered into by employees and employers; hence the employee must not engage activities that are not within his mandate or scope of employment or union24.

Collier J, in Jones v Queensland Tertiary Admissions Centre Ltd25stated that the employee role as a bargaining representative of the employer in an enterprise agreement negotiation falls within the scope of workplace rights under section 34 (1) (a)-(b) to be able to participate in the process under a workplace law. In Greater Dandenong City Council v Australian Municipal and Administrative Clerical and Services Union26 the court argued that the phrase “entitled to benefits of’27 is used to demonstrate that a workplace law or instrument applies to a person and the individual entitlements created under a workplace law or instrument for instance wage rates.

The impact of the FW Act brings parties to engage in collective bargaining especially on the fate of the employer and unions that are involved in disputes. Bargaining must be carried out in good faith and must be in the best interest of the worker. The employee however has an influence over the employees with him having the ability to fire them. The FW Act protects the employees by stopping the employer from using devious ways of undermining union representation28 such as firing an entire workforce29 or insisting on individual agreements as opposed to unions30.

The protection of union membership under a union membership is stated to include the right to have terms and conditions of employment regulated on a collective basis31 . Therefore the right to association is not only for the purpose of being in a union but also extends to agreements of entered into by the employees and the employers.

The subject of industrial action arises on the basis of breach or agreements by employers and without the CBA then the place of unions would be done away with. Unions give their members a chance to negotiate for better working conditions, better pay and working hours as opposed to an individual entering into a contract with the employer.

Conclusion

The freedom of association is a unique element in unions and the employee participation in industrial action. The freedom of association is not only linked to industrial action, but gives the employee a chance
negotiate for better pay, salary and protect them from unfair dismissal and discrimination at the workplace. However an employer is not stopped from creating agreements that improve efficiency and flexibility in the workplace as long as they are consistent with the law.

REFERNCES

  1. Articles /Books

Creighton Breen and Andrew, Stewart, Labour Law: An Introduction, ( Federation Press, 5th ed, 2010)

Colgrave, Ian, ‘Employee Protections in the Fair Work Act: Adverse Action against Employees Exercising Workplace Rights’ (2010) 32 (9) Bulletin (Law Society of South Australia) 12

David Quinn, ‘To Be or Not to Be a Member –Is that the Only Question? Freedom of Association under the Workplace Relations Act ‘(2002) 17 Australian Journal of Labour Law 1

Goodwin, Emma and Bianca Friedman, ‘General Protections in PT 3-1 of the Fair Work Act on Trial: Controversy and Contradiction in the Courts’ (2010) 63 (4) Keeping Good Companies 233

Kahn- Freund, Otto, Labour and the Law (Stevens & Sons, 2nd ed, 1977)

Kirwan Lucy ‘Freedom of expression and the employment relationship’ (2004) 17 Australian Journal of Labour Law 1

Shae McCrystal, ‘The Fair Work Act 2009 (Cth) and the Right to Strike’ (2009) 23 Australian Journal of Labour Law 3, 4

Australian Municipal, Administrative Clerical & Services Union v Anseett Australia Ltd [2000] FCA 441

Australian Workers Union v BHP Iron Ore Pty Ltd [2000] FCA 39

Barclay v Board of Bendigo Regional Institute of Technical and Further Education [2010] FCA

Finance Sector Union v Commonwealth Bank of Australia (2005) 145 FCR 158

General Motors Holden Pty Ltd v Bowling (1975) 12 ALR 605

Greater Dandenong City Council v Australian Municipal Clerical and Services Union [2001] FCA 349

Jones v Queensland Tertiary Admissions Centre Ltd (No 2) [2010] FCA 399

Stevedores Operations No 2 Pty Ltd v Marine Union of Australia [1998] HCA 30

C. Legislation

Industrial Relations Act 1988 (Cth)

Fair Work Act (2009) (Cth)

Workplace Relations Act 1996 (Cth)

D. Treaties

International Labour Organisation Convention (No 87) Concerning the Freedom of Association and Protection of the Rights to Organize , opened for signature 9 July 1948, 68 UNTS 17 (entered into force 28 February 1973)

1International Labour Orgnaization Convention (No 87) Concerning the Freedom of Association and Protection of the Rights to Organise , opened for signature 9 July 1948, 68 UNTS 17 (entered into force 28 February 1973)

2 Otto Kahn-Freund, Labour Law and the Law (Stevens & Sons, 2nd ed, 1977)6

3 Australian Workers Union v BHP Iron Ore Pty Ltd (2000) 102 FCR 97

4 (2000) 102 FCR 97

6 Workers Relations Act

7 Ibid n 6 s 298 K

8 Fair Work Act (2009) Cth s 3

9 Ibid s 346

10 Ibid s 3(a).

11 FW Act (2009) s 346

12Australian Workers Union v BHP Iron Ore Pty Ltd [2000] FCA 39

13 Ibid Gary j

14 Breen Creighton and Andrew Stewart, Labour Law (Federation Press, 5th ed, 2010) 15

15 Shae McCrystal, ‘The Fair Work Act 2009 (Cth) and the Right to Strike’ (2009) 23 Australian Journal of Labour Law 3,4.

16 Explanatory Memorandum, Fair Work Bill 2008, page ii

17 [1987] 1 SCR 313

18 Ibid 371 (McIntyre J)

19 S 124 (1)

20Section 288 (1)(e)

21 Finance Sector Union v Commonwealth Bank of Australia (2005) 145 FCR 158

22 Section 341 (2)

23 Australian Municipal, Administrative Clerical & Services Union v Anseett Australia Ltd [2000] FCA 441

24 General Motors Holdens Pty Ltd v Bowling (1976) 12 ALR 605

25 (2009) 190 IR 218

26 (2001) 112 FCR 232

27 Section 34 (1) (a)

28 David Quinn, ‘To Be or Not to Be a Member –Is that the Only Question? Freedom of Association under the Workplace Relations Act ‘(2002) 17 Australian Journal of Labour Law 1

29 Stevedores Operations No 2 Pty Ltd v Marine Union of Australia [1998] HCA 30

30 Australian Workers Union v BHP Iron Ore Pty Ltd (2000) 102 FCR 97